So, Boeing…. how much fraud and corruption finally crosses over the line?

Here is a story regarding more antics of Boeing that have come into the light, thanks to a reader who stays alert for such stories. GFS

G Florence:

Straight from federal Executive Order to the Secretary of Defense, one of the federal requirements for continuing participation in the National Industrial Security Program: “The company must have a reputation for integrity and lawful conduct in its business dealings.” But then we read articles like the one below, and that’s when we realize that Boeing is bigger than the federal government. $13.7 million dollars does not even represent a slap on the wrist to Boeing. The Old Navy Man

The Defense Logistics Agency “is seeking a refund from Boeing,” spokeswoman Michelle McCaskill said in an e-mailed statement. “The refund will be for the full $13.7 million identified” and will be requested by July 31, she said.

The agency overpaid about $1.3 million for 573 of the aluminum “bearing sleeves” used on an aircraft’s main landing-gear door that should have cost $10 each, the Pentagon’s inspector general said in an audit labeled “For Official Use Only.”

Wasteful spending resulted from agency personnel failing to negotiate good deals or to perform adequate oversight, and from Boeing’s failure to pass on savings it won from subcontractors, according to the complete audit report. A summary of the findings was reported by Bloomberg News on June 7.

Boeing “has been working with the Defense Logistics Agency” and the inspector general “throughout the audit process,” Ellen Buhr, a spokeswoman for Boeing’s Global Services and Support unit, said in an e-mailed statement. “We are working with DLA to review the official report and to understand the issues identified.”

Second Time
The audit marks the second time in two years that the inspector general has cited excessive parts pricing by Chicago-based Boeing, the Pentagon’s second-biggest contractor after Lockheed Martin Corp. (LMT) A May 2011 inspector general’s audit of two Boeing contracts for an Army depot in Corpus Christi, Texas, found about $13 million in overcharges on $23 million in orders.

The Pentagon has recovered $2.67 million in that case, according to Bridget Serchak, a spokeswoman for the inspector general’s office. The Defense Contract Audit Agency is reviewing the contract to see if more refunds are in order, another spokeswoman, Army Lieutenant Colonel Elizabeth Robbins, said in an e-mailed statement.

In the more recent audit, the inspector general took what it described as a “nonstatistical sample” of 60 spare parts on 2,659 delivery orders valued at about $81.1 million and found issues involving prices for parts on 1,469 orders valued at $27.2 million.

The sample was part of almost 3,400 spare parts valued at about $142 million that the agency had purchased.

Aircraft Parts
The excessive prices were found on a sample of parts requested under a 2009 “basic ordering agreement” for components and assemblies used on B-1B and B-52 bombers, E-3 surveillance aircraft, KC-135 tankers, Minuteman nuclear missiles and AC-130U gunships.

Boeing overcharged the Defense Logistics Agency’s aviation unit the $13.7 million on 1,469 delivery orders after government personnel failed to negotiate “fair and reasonable prices,” according to the inspector general’s audit.

“If prices are not corrected, DLA Aviation will continue to overpay on future sole-source spare parts procured from Boeing,” it said.

Boeing “did not maintain complete cost and pricing data for 20 delivery orders valued at $3.4 million” because of inadequate agency oversight, the inspector general found. The company issued internal guidance in December emphasizing the need to maintain adequate documentation, it said.

In addition, inspectors found cases in which Boeing failed to pass on savings it obtained.

Negotiating Prices
“Boeing either negotiated for lower prices from its suppliers or obtained spare parts at lower prices from different suppliers,” the audit found. The company “is not required to notify” the agency “when the subcontractor changes its prices, and Boeing did not pass on any cost savings.”

In one example cited, Boeing in February 2008 cited a price of $8,474 each for a “control surface part kit” that attaches to an aircraft’s left elevator.

Auditors obtained Boeing purchase orders indicating it paid about $4,080 for the kit, “resulting in an overpayment of approximately” $4,394 per kit — or about $1.2 million for 273 of them.

Boeing charged the defense agency $17,628 apiece for a “channel” engine structural support on the AC-130U gunship that company documents showed cost about $1,354 each, or an overpayment of more than $16,000, according to the audit.

6 Comments:

The beginning of the worst of the race to the bottom on a sled of greed and corruption, began in my view with the “solution” the DOJ came up with after the infamous “Boeing Tanker Deal.” The solution to all of this was now attorney general, Eric Holder’s baby – the increasingly infamous “Non-Prosecution Agreement.” The use of this has proliferated and this trick allows a company to continue to receive government contracts, even if they have been commiting illegal or unethical acts, as long as the upper management and officers of the company can point to someone, (usually lower on the food chain), to blame for the atrocities. That way, the sacrificial goat is offered up and slaughtered, and the others, continue on with their criminal ways unabated. It has just gotten worse over the years. And Holder is protected and allowed to continue to orchestrate this to the benefit of the large corporations who offend. GFS

Boeing is an unethical company, I got fired for not putting on a second redundant transfer lock that I did not need to place. Boeing did not provide the rules concerning lockout, even though it was subpoenaed, that information should have won me rehire with pay. Boeing management also committed perjury under oath, I sued Boeing twice over the issue and the first suit was dismissed without prejudice. The second suit she ruled against me and I still could appeal but I have already spent too much money on the thing, in her decision Judge Marsha Pechman in her dismissal of fraud charges said that perjury in a different court and not complying with a subpoena in a different court was not fraud. Boeing knows it was unethical in its treatment of me and they don’t care, they just want to fight and fight. Here is a link to the Boeing cases I had, maybe it will help somebody else’s case that Boeing is unethical that does not necessarily comply with the law,https://skydrive.live.com/redir.aspx?cid=65311a497a3c9f2f&resid=65311A497A3C9F2F!492&parid=65311A497A3C9F2F!118&authkey=!AAIpVJ_ujCLUggc&ithint=folder%2c.docx

Sorry you had to go through that. The Boeing Company has a stable of their own attorneys and seems to have threads going out to city and county legal departments and law enforcement departments as well. It is a difficult thing to take them on. There is evidence in numerous places it seems of people who have experienced the frustrations and the seeming corruption you have experienced. I hop you can move on and put your life back together. GFS

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GFS

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